FHFA Increases 2020 Maximum Conforming Loan Limits to $510,400

The Federal Housing Finance Agency yesterday announced maximum conforming loan limits for mortgages to be acquired by Fannie Mae and Freddie Mac in 2020, with the 2020 maximum conforming loan limit for one-unit properties rising to $510,400 from $484,350.

FHFA said for areas in which 115 percent of the local median home value exceeds the baseline conforming loan limit, the maximum loan limit will be higher than the baseline loan limit. The new ceiling loan limit for one-unit properties in most high-cost areas will rise to $765,600 (150 percent of $510,400).

Special statutory provisions establish different loan limit calculations for Alaska, Hawaii, Guam, and the U.S. Virgin Islands. In these areas, the baseline loan limit will be $765,600 for one-unit properties.

FHFA said as a result of generally rising home values, the increase in the baseline loan limit, and the increase in the ceiling loan limit, the maximum conforming loan limit will be higher in 2020 in all but 43 counties or county equivalents in the U.S.  

The Housing and Economic Recovery Act requires the baseline conforming loan limit be adjusted each year for Fannie Mae and Freddie Mac to reflect changes in the average U.S. home price. Yesterday, FHFA published its third quarter 2019 FHFA House Price Index report (https://www.fhfa.gov/DataTools/Downloads/Pages/House-Price-Index.aspx), which includes estimates for the increase in the average U.S. home value over the past four quarters. According to FHFA’s seasonally adjusted, expanded-data HPI, house prices increased 5.38 percent, on average, between third quarters of 2018 and 2019, with the baseline maximum conforming loan limit in 2020 will increase by the same percentage.

HERA also establishes the maximum loan limit in those areas as a multiple of the area median home value, while setting a ‚Äúceiling” on that limit of 150 percent of the baseline loan limit. FHFA said median home values generally increased in high-cost areas in 2019, driving up the maximum loan limits in many areas. 

A list of the 2020 maximum loan limits for all counties and county-equivalent areas in the U.S. can be found at https://www.fhfa.gov/DataTools/Downloads/Pages/Conforming-Loan-Limits.aspx. For a map showing the 2020 maximum loan limits across the U.S., click https://www.fhfa.gov/DataTools/Tools/Pages/Conforming-Loan-Limits-Map.aspx. For a description of methodology used to determine the maximum loan limits in accordance with HERA, click https://www.fhfa.gov/DataTools/Downloads/Documents/Conforming-Loan-Limits/CLLAddendum_CY2020.pdf.